ANZ Bank is the last of the big four banks to announce its move on interest rates this month, cutting its standard variable mortgage and small business interest rates by 37 basis points.

From May 18, the bank's variable mortgage rate will be 7.05 per cent per annum. It is less than the 50 basis point cut delivered by the Reserve Bank earlier this month.

ANZ's chief executive for Australian operations Philip Chronican said the bank tried to remain competitive on its lending rates despite "sustained funding pressure" as it maintained higher rates for depositors, and amid ongoing volatility in wholesale markets.

"At this month's review we noted that the RBA's recent decision to reduce the cash rate has impacted domestic funding sources, giving us scope to reduce lending rates by 0.37 per cent per annum," Mr Chronican said.

In December last year ANZ announced it would make its rates decisions on the second Friday of each month, outside the Reserve Bank's monetary policy cycle.

But she says that the banks' decision not to pass on the whole 50 basis points cut by the Reserve Bank earlier this month would help them strengthen those margins.

Last week, Westpac announced it would cut its variable mortgage rate by 37 basis points to 7.09 per cent per annum, Commonwealth Bank lowered its rate by 40 points to 7.01 per cent and National Australia Bank's rate is down 32 points to 6.99 per cent.